Loyalty prizes in supermarkets offer ‘real savings’, says Watchdog

Loyalty prizes at UK supermarkets do offer “real savings”, but customers should still shop around as it is not always the cheapest option, the competition watchdog has found.

The Competition and Markets Authority (CMA) said analysis of 50,000 loyalty products found 92% offered savings on the usual price.

And customers can save up to 25% by purchasing products with a loyalty price, according to the regulator.

But it stressed that while they offer ‘legitimate’ discounts, supermarket customers can still find cheaper alternative options by shopping around.

The CMA added that there was also “room for improvement” in people’s ability to access loyalty programs and that supermarkets could do more to help people without access to smartphones, and under the age of 18, to access get to these prices.

George Lusty, interim director of consumer protection, said: “We know that many people do not trust loyalty card prices. That’s why we took a deep dive into whether supermarkets were treating their customers fairly.

“After analyzing tens of thousands of products, we found that almost all loyalty prizes reviewed delivered real savings over the usual price – a fact we hope will reassure consumers across the UK.

“While these discounts are legitimate, our research has shown that loyalty pricing isn’t always the cheapest option, so shopping around is still key.”

Loyalty price promotions are part of loyalty programs, where customers can sign up for lower prices, personalized rewards and offers, and loyalty points.

The CMA analyzed loyalty prices from Tesco, Sainsbury’s, Morrisons, Waitrose and Co-op.

The CMA investigated whether non-member or regular prices had been artificially inflated by supermarkets to make their loyalty price appear more attractive.

The study found that shoppers can save an average of 17% to 25% by purchasing loyalty price products at the five chains in the study.

But many shoppers don’t trust the discounts on offer, with more than half (55%) of people thinking usual prices are being increased to make loyalty deals more attractive, the CMA said.

More than three-quarters (76%) of people say loyalty prices have not changed where they shop, but almost a quarter (24%) are comparing prices more often as a result of the introduction of loyalty prices.

There are also concerns among shoppers about access to loyalty pricing, with 43% of respondents saying they think it is unfair that members of these programs pay lower prices for some products than those without membership.

As part of the extensive investigation, the CMA also looked at how supermarkets collect and use people’s data when they sign up to loyalty programmes.

It says it has not found any evidence that consumer law has been broken in this regard.

Sue Davies, head of food policy at consumer group Which?, said that while the findings were “reassuring”, there were still concerns about the practice of loyalty pricing.

She said, “Which one? also looked at prices for thousands of products and repeatedly found examples of loyalty price offers that aren’t as good as they seem.

“We also raised concerns that millions of consumers are being excluded from access to lower prices due to loyalty program restrictions.

“It is therefore vital that supermarkets act on the CMA’s recommendation and do more to enable people to join their schemes.”